Credit Counseling FAQ
What should I consider when looking into consumer credit counseling?
A few questions you should consider when looking into consumer credit counseling are: 1) Are there any upfront consultation fees? 2) Is there a fee to enroll in the program and/or a monthly fee and if so, how much? 3) How will this program affect my credit score? 4) Will my creditors continue to harass me while on this program? 5) Does the organization have a satisfactory listing with the Better Business Bureau?
What is unsecured debt?
Unsecured debt is debt for which a creditor holds no collateral, such as credit cards, department store cards, medical bills etc.
What is credit counseling and how is it going to help me with my financial issues?
Credit counseling is the process of analyzing your income and expenses and then recommending modifications to your budget in an effort to help you make ends meet. With the help and assistance of a certified credit counselor, you will be able to identify areas within your budget for possible savings. Typically we can help you free up 10% to 15% of your income by going through this process.
When is my first payment due?
When you enroll in a debt management program with credit counseling, you can pick the payment date that is best for you! You may choose any day from the 1st to the 30th of every month, but you must choose a payment date within 30 days of enrollment for your first payment date.
How much do your services cost?
Enrollment in our program is free, however like many IRS approved Non-Profit organizations, (hospitals, credit unions, churches) we require financial support from the people we serve. We request a payment of $39 per month to help defray the costs of maintaining your accounts and mailing checks each month to your creditors.
Can I still use my credit cards?
As part of our credit counseling services, we tell the creditors you have a sincere desire to get out of debt and ask them to help. Creditors usually offer concessions with interest rate, payment, and so forth. As a result, the accounts included in your debt consolidation management plan are frozen or closed until you are debt free.
What if I need a credit card for travel or emergencies? Do I have to put all of my creditors on the program?
No, it is entirely up to you which accounts you put on the program. We have many clients in our credit counseling program that need to keep a credit card for travel and other purposes.
Can you help if I am being charged late fees?
Most creditors will stop charging late & over limit fees once you enroll in our program.
What if I am past due on my accounts?
No problem. Creditors just want to be paid. Most creditors will bring your accounts current, stop late and over limit fees, stop collection calls and stop or reduce interest. Most creditors will also Re-Age your account (bring it to a current status, showing no behind payments are due).
Should I get a loan instead?
We don’t recommend it as loans are what got you into trouble in the first place. Most unsecured loans have high interest, and if you get a home equity loan you are now securing your credit cards with your home. Our credit counseling services can help.
Will I continue to get phone calls and collection letters from my creditors?
Most creditors will stop collection activity once they receive the first payment. Also, the Fair Debt Collection Practices Act is a federal act that strictly states when collectors may contact you, where they may contact you, who they may contact concerning you and how much information they are allowed to disclose to individuals who are not you. Creditors must follow these rules. If creditors do not follow these stated polices, then their calls and letters could be labeled as harassment.
Is this confidential?
Absolutely. We never have and never will sell your name or address to any party for any reason.
Must I remain on the program until I am debt free?
No. You are only enrolled on our program for as long as you want to be. You may terminate the plan at any time for any reason. Call to learn more about our credit counseling services.
Does this affect my credit in anyway?
Generally it is neither a plus nor a minus on your credit due to the fact that you are still making the payments. Also, your payments are computed based upon each individual creditor’s requirements (what they deem to be acceptable). We do not report to the credit reporting agencies however, it is in the sole discretion of your creditors whether or not they report your credit counseling status.
How long does it take to get started on the Program?
When you use our on-line forms, you can get started the same day.
Will a debt management program also help me with my overall monthly budget?
Yes, our debt management program and credit counseling will help you to adjust your monthly expenses and formulate a monthly budget. All of your unsecured debts can be paid from automatic deductions from your checking or savings accounts on the day that you choose. By consolidating your payment dates to one day, you will be able to plan a more efficient and effective monthly budget.
What information should I have on hand in order to get started?
You will need all of your creditors names, phone numbers, account numbers, balances, interest rates and required minimum monthly payments for each account. It is a good idea to gather your most recent statements. All information must be accurate and current in order for us to process your application. If information is inaccurate then your creditors may not accept you on the program.
How do you figure what my monthly payment will be?
Each of your creditors has specific guidelines that we must abide by in order to allow them to accept your payments. Depending on your balance the creditors require a certain amount of that balance for your monthly payment. We calculate the lowest possible monthly payment that you can make to keep you in good standing with your creditors. There is no penalty to send more each month, if you can do so it will help get you out of debt sooner, and if not, you at least know the minimum amount that you can send. Call us to learn more about our credit counseling services.
Does your organization have a satisfactory listing with the Better Business Bureau?
American Credit Foundation/DebtGuru.com® has been a member of the Better Business Bureau since 1999. You can click the following link to verify our BBB membership and current A+ ranking.
Can a collector call my employer and have my wages garnished?
Not without a judge’s signature. The Constitution of the United States guarantees you “due process.” This means that a collector must sue you and the matter must be heard before a judge before your wages can be garnished.